Private Equity Investments in India - advent-uk Equity Investments in ... Clean tech or renewable energy ... Sequoia Capital and the Carlyle Group have a presence in

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<ul><li><p>Private Equity Report on India </p><p>Private Equity Company India Page 1 </p><p>Private Equity </p><p>Investments in India </p></li><li><p>Private Equity Report on India </p><p>Private Equity Company India Page 2 </p><p>Table of Contents </p><p>Introduction ........................................................................................................................................................................................................................................................... 4 </p><p>Matrix of PE cycle .................................................................................................................................................................................................................................................. 4 </p><p>Executive Summary ............................................................................................................................................................................................................................................... 5 </p><p>The Indian PE History:............................................................................................................................................................................................................................................ 6 </p><p> Key findings from our analysis of PE-VC investments over the years: ................................................................................................................................................. 7 </p><p> Sector wise past trend analysis from 2004-2008.9 </p><p> Sector wise Investments' and analysis from 2004-2008 10 </p><p>Present Scenario of P E in India ........................................................................................................................................................................................................................... 11 </p><p> Key findings from our analysis of PE-VC in the current scenario ....................................................................................................................................................... 13 </p><p>Present opportunity for PE firms in India ............................................................................................................................................................................................................ 14 </p><p> Education18 </p><p> Health care18 </p><p> Clean tech or renewable energy18 </p><p> Food Processing 18 </p><p> Infrastructure ..................................................................................................................................................................................................................................... 16 </p><p> Automotive sector .............................................................................................................................................................................................................................. 19 </p><p> Manufacturing sector ......................................................................................................................................................................................................................... 19 </p><p> Growth in Indias manufacturing sector ............................................................................................................................................................................................. 19 </p><p>Key driver for the growth of P E in India ............................................................................................................................................................................................................. 20 </p><p> Drivers for the growth ........................................................................................................................................................................................................................ 21 </p><p> Key PE deal drivers in India ................................................................................................................................................................................................................. 22 </p></li><li><p>Private Equity Report on India </p><p>Private Equity Company India Page 3 </p><p>Room for new PE players in the market .............................................................................................................................................................................................................. 22 </p><p>Challenges for PE players in India ........................................................................................................................................................................................................................ 23 </p><p> Legalities for foreign PE players ......................................................................................................................................................................................................... 25 </p><p> Overview of Tax and Regulations in India .......................................................................................................................................................................................... 25 </p><p> DTAA ................................................................................................................................................................................................................................................... 26 </p><p> Opportunity for International PE players in India .............................................................................................................................................................................. 27 </p><p> Deal opportunities .............................................................................................................................................................................................................................. 28 </p><p>Due diligence and Valuation ................................................................................................................................................................................................................................ 29 </p><p> Due diligence can be performed in all the areas mentioned below .................................................................................................................................................. 29 </p><p>Exit opportunities ................................................................................................................................................................................................................................................ 29 </p><p>5 forces Analysis for Private Equity Company in India ........................................................................................................................................................................................ 30 </p><p> Entry barrier ....................................................................................................................................................................................................................................... 31 </p><p> Threat of substitutes .......................................................................................................................................................................................................................... 31 </p><p> Power of Buyer ................................................................................................................................................................................................................................... 31 </p><p> Power of supplier ............................................................................................................................................................................................................................... 32 </p><p> Competitiveness of the Industry ........................................................................................................................................................................................................ 32 </p><p>SWOT Analysis ..................................................................................................................................................................................................................................................... 32 </p><p> Strength .............................................................................................................................................................................................................................................. 33 </p><p> Weakness ............................................................................................................................................................................................................................................ 33 </p><p> Opportunity ........................................................................................................................................................................................................................................ 33 </p><p> Threats ................................................................................................................................................................................................................................................ 33 </p><p>Proposed USP of Private Equity Company in India .............................................................................................................................................................................................. 34 </p><p>Recommendation ............................................................................................................................................................................................................................................... 34 </p><p>Conclusion.36 </p></li><li><p>Private Equity Report on India </p><p>Private Equity Company India Page 4 </p><p>Introduction </p><p>The PE Report gives an overview of the PE investments in India. The report presents the past investments, highlights the upcoming </p><p>industry for future investments, tax efficiency for foreign investments, etc. The research team has also done SWOT analysis and 5 </p><p>forces analysis in the report. This will give a reader an idea for market positioning and USP for Private Equity Company in India. </p><p>Matrix of PE cycle </p><p>Sourcing from LP's and GP's </p><p>Deal flow, Investing </p><p>Value creation </p><p>Exit </p></li><li><p>Private Equity Report on India </p><p>Private Equity Company India Page 5 </p><p>Executive Summary </p><p>1. After a setback in PE investment in 2008, 2010 rebounded with big investments of Euro 6.5 billon compared to Euro 2.90 </p><p>billion in 2009. First quarter of 2011 has already reported investments of Euro 2.25 billion. </p><p>2. Non-financial services, infrastructure, telecom etc. has been the favorite PE investment avenues till date. </p><p>3. India remains an attractive market for international investors because of its fast economic development, political factors, </p><p>large numbers of English speaking population, large talent pool, etc. </p><p>4. PE firms seeking to raise approximately Euro 24 billion in 2011. The bulk of new capital will continue to come from offshore </p><p>investors that face fewer restrictions and are freer from complex tax and legal burdens </p><p>5. DTAA (double taxation avoidance agreement) helps international investors to remit their funds out of India without paying </p><p>any tax. Please find the details on the KPMG report enclosed. </p><p>6. Infrastructure and Manufacturing sector holds lot of promises for PE investment followed by upcoming sectors like Education, </p><p>food processing etc. </p><p>7. According to industry experts the real action and the biggest need of capital for capital in India is for companies under Euro 40 </p><p>million in revenue. </p><p>8. International PE firms biggest challenge while working with Indian companies is that the majority are family run businesses </p><p>and generally there is a lack of corporate governance. To overcome this, industry experts suggest the Investment manager </p><p>should know family dynamics well. </p><p>9. Other than the capital, PE firms should bring the expertise of technology, governance, etc. as well, which has direct </p><p>implications on the efficiency of the Investee Company. </p></li><li><p>Private Equity Report on India </p><p>Private Equity Company India Page 6 </p><p>10. The opportunities of the SWOT analysis can be the USP for Private Equity Company in India. There can be the value creation </p><p>by giving investee companies exposure to the European market, Chinese market/sourcing, global strategies (strategic alliances </p><p>with European companies for value addition and may be at time of exit) and corporate governance. </p><p>11. One of the threats can be the introduction of a new Tax law in India in April 2012 called DTC (Direct Tax Code); which could </p><p>apply tax on capital gains on foreign investment. However industry experts suggest that the international tax treaty will be </p><p>respected. </p><p>12. For exit opportunities Private Equity Company has an upper hand. At the time of exit they can have strategic alliance with a </p><p>European company, IPO overseas or selling it to an international PE. </p><p>13. In order to create something valuable between India, France and China cross learning, transfer of knowledge and close </p><p>cooperation will play a key role. </p><p>The Indian PE History: </p><p>In India, private equity is reasonably young, dating back to the mid-1990s. Indian companies received almost no Private Equity (PE) </p><p>or Venture Capital (VC) funding prior to mid-90s. The environment heated up in the end of the 90s with the IT boom, with </p><p>companies in IT. This scenario began to change in the late 1990s with the growth of Indias IT companies and with the simultaneous </p><p>dot-com boom in India. VCs started making large investments in these sectors; however, the bust that followed led to huge losses </p><p>for the PE and VC community, especially for those who had invested heavily in start-ups and early-stage companies. After almost </p><p>three years of downturn in 2001-2003, the PE market began to recover towards the end of 2004. PE investors began investing in </p><p>India again, except this time they began investing in other sectors as well (although the IT and BPO sectors still continued to receive </p><p>a significant portion of these investments) and most investments were in late-stage companies. Early-stage investments have been </p><p>dwindling or have, at best, remained stagnant right through mid-2007. In recent years, there has been a resurgence of these firms, </p></li><li><p>Private Equity Report on India </p><p>Private Equity Company India Page 7 </p><p>with Indias stock markets booming and sectors like the life sciences, infrastructure and most recently real estate being growth </p><p>stories for the future. Global firms such as Warburg Pincus, Blackstone, Sequoia Capital and the Carlyle Group have a presence in </p><p>India, while Indian players like ICICI Venture and ChrysCapital are vital players in the industry. </p><p>PE-VC investments in India have w...</p></li></ul>